After a long period of underperformance related to the Chinese government's crackdown on Jack Ma, Alibaba finally got an upside breakout from its triangle this morning.
Alibaba has had some recent analyst upgrades (although its Equity Starmine Summary Score is only up to 2.2/10 from its previous score of 0.9/10. It has also had some positive buzz. A couple of Alibaba-backed companies, DiDi and Xpeng, are soon to be listed on major new exchanges in Hong Kong and the US, and Alibaba is also in talks with Chinese state-owned enterprises to collaborate on a credit scoring business. Alibaba is also rising in sympathy with the ecommerce sector as a whole, which is outperforming the market right now.
BABA's forward P/E is down to about 22, which isn't bad for a mega-cap tech giant. According to Fidelity, BABA has a PEG ratio around 1, which is roughly fair value. I think you could do a lot worse than to buy BABA and hold for a long time.
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Related: Tencent is also working on a trend line breakout today, though with less conviction than Alibaba. Tencent's valuation is a little higher, though the company has been really aggressive lately with early-stage investments in EVs and ridesharing, so the growth potential is certainly there.
Thank you Christopher!
I've been looking at BABA for some time, but what worries me the most is the Chinese government, do you think most of their problems associated with the government are gone for now?
ChristopherCarrollSmith
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@Avirany, no, I don't think they're gone. I just think the price has overreacted to them.
I've been looking at BABA for some time, but what worries me the most is the Chinese government, do you think most of their problems associated with the government are gone for now?